BGL - Share Price forecast and results, page-394

BGL - Outperform
Value: 99c
12 month target price $1.00

Key points
 BGL’s Stage One study for Bellevue was in line with production
estimates while a lower inventory grade saw higher AISC and capex costs.
 We incorporate a capital raise into our base case to complete project
funding with BGL noting that it will maintain its accelerated drilling rates.
 The company will release a Stage Two study in July which we expect will
outline a mining inventory beyond the 7.4-years presented in Stage One.

We push our first gold expectation back ~9 months and lift AISC and capex.
We now incorporate a A$100m capital raise to complete Bellevue's funding.
The later first gold date sees EPS move from a small positive to a small
negative in FY22 with an 88% reduction in FY23 EPS, a 57% reduction in
FY24 and ~36% lower thereafter. The higher capex and cost profile coupled
with the additional dilution sees our TP fall 33% to A$1.00/sh. Our new
forecasts are exposed to operational, gold price, and exchange rate risks.


Price catalyst
• 12-month price target: A$1.00 based on a DCF methodology.
• Catalyst: BGL will release a Stage Two study for Bellevue in June 2021.

Action and recommendation
• Maintain Outperform. BGL’s initial study was in line with our production
estimates while the lower-than-expected inventory grade drove materially
higher AISC and pre-production capital costs. Overall, the initial study for
Bellevue is encouraging. However, given the scale of the mineral system and
track record of resource growth/discovery, we believe the project would benefit
from continued exploration activity. To this end, we expect the Stage Two
Study (due June 2021) will demonstrate another step up in mineral inventory.


12 month target price reduction from $1.50 to $1.00 based on current FS

DYOR (but get onboard TOOT TOOT)